can you help me solve this? thanks Carrier Mailbox produces decorative mailboxes

Question

can you help me solve this? thanks

Carrier Mailbox produces decorative mailboxes. The company's average cost per unit is $22 43 when it produces 1,200 mailboxes. Requirements 1. What is the total cost of producing 1.200 mailboxes? 2. f313,516 of the total costs are fixed, what is the variable cost of producing each mailbox? 3. Write Carrier Mailbox's cost equation If the plant manager uses the average cost per unit to predict total costs, what would the forecast be for 1,800 mailboxes? 5. I the plant manager uses the cost equation to predict total costs, what would the forecastl be for 1,800 mailboxes? 6. What is the dollar difference between your answers to questions 4 and 5? Which approach to forecasting costs is appropriate? Why? Requirement 1. what is the total cost ot producing 1.200 maiboxes The total cost of producing 1,200 mailboxes is $ Requirement 2. If $18,516 of the total costs are fixed what is the variable cost of producing each mailbox? The variable cost per unit is S Requirement 3. Write Carrier Mailbox's cost equation Requirement 4. If the plant manager uses the average cost per unit to predict total costs, what would the forecast be for 1.800 mailboxes? The total cost is sIN Requirement 5. If the plant manager uses the cost equation to predict total costs, what would the forecast be for 1.800 mailboxes? The total cost is S Requirement 6. What is the dolla difference between your answers to Questions 4 and 5? Which approach to forecasting costs is appropriate? Why? too high if helshe uses the l to predict costs The plant manager's forecast would be The method, he/she is erro?eously assuming that the manager should use the fixed components of producina mailboxes Choose trom any list or enter any number in the input tields and then continue to the next question is based on a mixed cost that will change as volume changes If the manager uses thi does not change at different volumes. The to predict costs since it correctly lakes into account the variable and

Explanation / Answer

SOLUTION

1. Total cost = Average cost per unit * No. of mailboxes

= $22.43 * 1,200

= $26,916

2. Variable cost = Total cost - Fixed cost

= $26,916 - $18,516

= $8,400

3. y= vx + f

v= variable cost, f= fixed costs

Variable cost per number of the mailbox = Variable cost / Number of mailbox

= $8,400 / 1,200 = $7

y = $7 x + $18,516

4. Total cost = Average cost per unit * No. of mailboxes

= $22.43 * 1,800

= $40,374

5. y = vx + f

y = $7 (1,800) + $18,516

= $12,600 + $18,516 = $31,116

6. Cost equation is more appropriate to predict the total cost. This is because average cost per unit should not be used to predict total cost at different volume of mailboxes because it changes as volume change the averages cost per mailboxes also. The average cost per mailboxes decrease as the volume increase due to the fixed cost of the total cost.

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